Kenya: Tea Farmers to Get Lower Bonuses

23 September 2020

Farmers will receive lower bonuses this season due to a glut that reduced prices in the international market.

Overproduction of green leaf has caused prices to plummet, Kenya Tea Development Agency (KTDA) chairman Peter Kanyago warned Wednesday.

But some farmers protested that high deductions to finance the agency's operations had reduced their earnings, with reports suggesting that the highest pay per kilogramme is Sh30.

Mr Kanyago, however, explained that revenues have increased since more tea was sold compared to last year, hence farmers will pocket improved earnings.

Bonus payments are determined by factory directors for each agency's affiliated companies.

Mr Kanyago explained that the rate per kilo of green leaf delivered to the factories will be lower compared to last year.

Favourable weather

He said high green leaf production was due to favourable weather conditions that consequently affected the prices of tea.

The highest paid farmer in Nyeri from Gitugi tea factory will earn Sh26.35 per kilogramme of green leaf. Farmers in Ragati and Iria-ini tea factories will pocket the lowest, at Sh20 per kilo. Gathuthi and Chinga tea farmers will earn Sh23.25 and Sh21 per kilo, respectively.

In Murang'a the highest pay is Sh30 per kilo and the lowest Sh24.40 per kilo.

Mr Kanyago said production increased by 29 per cent at the end of June to 1.45 billion kilogrammes, up from 1.13 billion kilogrammes last year.

"Tea prices per kilo will be lower this year, but farmers will earn more than they did last year due to the fact that they supplied more tea to their factories," Mr Kanyago said yesterday in Nyeri.

In the Rift Valley, tea production increased by 38 per cent from 67 million to 97 million kilos.

Audit demand

But tea farmers in Murang'a demanded that KTDA's legal budget be audited, blaming the expenditure for the low bonus.

Former Makomboki Tea Factory director Kamau Kaguma told the Nation that KTDA has over 200 court cases.

Mr Kaguma said the auditor-general should carry out a thorough audit of KTDA's accounts given all factories contribute 2.5 per cent of their earnings to finance its operations.

"In general, all tea farmers countrywide remit to KTDA not less than Sh2 billion annually for its operations. We now want to know how much of it has gone to finance the court cases and who authorised them," Mr Kaguma said.

The farmers' concerns came as the tea reforms task force chairman Irungu Nyakera warned KTDA against attempting to hold elections for directors' posts.

"That is an exercise in futility and we have a court order demanding that it ceases this monkey business," Mr Nyakera said.

Mr Kanyago called for dialogue between the government and stakeholders on reforming the sector. "We are not opposed to the tea reforms, but the government should engage us to find a win-win formula that will benefit the farmer," Mr Kanyago said.

He said the government will need Sh21.6 billion to transform the agency to a parastatal as the 54 KTDA-affiliated factories are private and owned by farmers.

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